Trade Group Would Like New Rules Ahead Of October Retrans Cycle

PITTSBURGH, June 30, 2014 -
With cable
operators increasingly prevented from providing their customers with out-of-market
broadcast signals, the American Cable Association called on the Federal
Communications Commission to adopt rules that would give operators the freedom
to negotiate carriage agreements with willing out-of-market stations to ensure consumer
access to vital information, such as news pertaining to their home states, and
timely emergency weather warnings.

"The
FCC must protect, to the greatest extent
possible, the ability of multichannel video programming distributors (MVPDs) to
negotiate retransmission consent with willing sellers for out-of-market signals
that in the MVPDs' view best satisfy consumer needs," ACA President and CEO
Matthew M. Polka said.

ACA
set forth its views in comments filed June 26 as the agency
continues to look for ways to align the retransmission consent rules with
market conditions as they exist today rather than the period following passage
of the 1992 Cable Act. On March 31, the FCC took a big first step in the right
direction by banning collusion in negotiating retransmission by any of a
market's top-four rated stations that are not under common ownership.

In the comments, ACA stressed
that the FCC should shore up the retransmission consent regime by making it a per se violation of the good-faith
bargaining rules for a network or a local TV station to prevent an MVPD from
reaching a retransmission consent agreement with an out-of-market station.

First adopted in 1966 when
cable was a nascent technology and retransmission consent wasn't needed, the broadcast
exclusivity rules allow a local broadcaster to prevent an MVPD from carrying
network or syndicated programming from a distant market station inside its 35/55
mile protected radius. By prohibiting
carriage only within the local affiliate's zone of exclusivity, MVPDs have been
free to carry distant signals in the areas outsize this zone. Depending on the size of a designated market
area (DMAs), some of which are quite large, this left a considerable open field
for distant signal carriage. With
retransmission consent now required, networks and local affiliates have used
these rules to prevent MVPDs from carrying distant signals counter to Congress and
the FCC's public policy protecting distant signal carriage.

In some cases, networks and
their affiliates have expanded the exclusivity zone to include entire DMAs, thus
contractually preventing distant network carriage in locations otherwise
permissible under FCC rules, and local TV stations, as an enforcement
mechanism, have withheld retransmission consent from MVPDs contingent on the
MVPD not carrying a distant affiliate.
ACA noted that these practices especially harm consumers beyond the
35-mile radius in cases where a signal from a neighboring market better serves
their communities' interests and needs than a DMA-assigned local TV station.

ACA said the FCC shouldn't
allow television networks and local stations to interfere with the exercise of
retransmission consent by other stations otherwise willing to grant
out-of-market retransmission consent or with the ability of MVPDs to carry
out-of-market stations under such circumstances.

"Adopting ACA's approach
would ensure that cable operators have the ability to provide consumers in
their service territories with the broadcast signals that provide the best
local content for the community. These
decisions are better made on the local level by local cable operators than by the
national broadcast networks and Nielsen, a global information and measurement
company," Polka said.

At the same time, ACA urged
the FCC to prohibit the exercise of network non-duplication and syndicated
exclusivity when the local station has not granted, and is not carried by the
MVPD. The rationale for protecting the
local station against distant signal importation disappears entirely when the
station is not carried. ACA argued that
this relief, coupled with the prohibition on third-party interference, should
better protect consumers against loss of access to network programming during a
retransmission consent negotiating impasse.

ACA also asked the FCC to raise
the limit of its small cable system exemption from 1,000 to 2,500 subscribers,
excluding systems affiliated with MSOs serving more than 10% of the market. ACA noted that the FCC has historically
adjusted the exclusivity rules to minimize their impact on small cable systems
and that changed market conditions support raising the exemption.

ACA reiterated its strong support
for extension of the Grade B or noise limited signal contour exception should network
non-duplication rules be retained, as recommended by ACA member Block
Communications. Broadcast stations
should have no reasonable expectation of exclusivity against adjacent-market
stations receivable over-the-air in the community. Longstanding FCC policy supports ACA in this
view. Allowing broadcast stations to
block cable customers from receiving network programming available over-the-air
squarely conflicts with this policy and should no longer be permitted.

About the American Cable Association:­ Based in Pittsburgh, the American Cable Association is
a trade organization representing nearly 850 smaller and medium-sized,
independent cable companies who provide broadband services for nearly 7 million
cable subscribers primarily located in rural and smaller suburban markets
across America. Through active participation in the regulatory and
legislative process in Washington, D.C., ACA's members work together to advance
the interests of their customers and ensure the future competitiveness and
viability of their business. For more information, visit http://www.americancable.org/

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